Thu, Oct 17, 2002 page11

• Business quick take

  • STAFF WRITER, WITH AGENCIES
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  Cleanup gets good reviews

  Taiwan government's determination to resolve the problem at the banking sector and attempts to increase the funding for the Financial Restructuring Fund has been viewed positive on the nation's sovereign rating, said officials at Fitch Ratings yesterday.

  "The longer the [banking] problems are not addressed, the greater the cost will be," said Therese Feng (馮來儀), an associate director of Sovereign (Asia) for Fitch.

  But Feng declined to say whether there are any downward pressure on Taiwan's sovereign rating basing on their preliminary views.

  "We will issue our official report at the end of November or early December," said Paul Grela, a director of Financial Institutions (Asia) for Fitch, citing their views are still subject to the final approval of the agency's internal rating committee.

  Fitch first issued its annul review of Taiwan's sovereign rating in November of last year. At that time, it assigned a A+, long-term sovereign rating on Taiwan with a stable outlook.

  "We have seen a major change in the attitude of private banks management and the authorities [on financial reforms] over the last 15 months," said Grela. But an actual implementation of the reform measures is key to the success of the government's plans, he added.

  Credit co-ops' debt fall

  Among the over 100 local credit cooperatives whose overdue loan ratios rose to 25 percent or higher over the past months, 61 have managed to reduce the ratios with the introduction of the government's financial reform measures, Fan Chen-tsung (范振宗), chairman of the Council of Agriculture, said yesterday at the legislature.

  Fan said that the government is hoping to help local credit cooperatives affiliated with farmers' or fishermen's associations transform themselves into commercial banks or merge with other banking institutions.

  FDI rules may be relaxed

  Taiwan is studying ways to relax foreign investment restrictions in a bid to attract multinational companies, an official said Wednesday.

  A consensus was reached Tuesday in an inter-ministerial meeting organized Tuesday by the Council for Economic Planning and Development (CEPD) that the government would scrap by the end of June 2003 a list of industries now closed to foreign investment, the CEPD official said.

  The list bans foreign investments in sectors such as postal savings, free-to-air television broadcasting and auto passenger transportation businesses.

  The CEPD proposed at the meeting that ceiling of foreign holdings in local cable TV companies to be raised to 60 percent from current 40 percent, the official said.

  Taiwan's top economic planner also suggested a five-year tax exemption for foreign investments in industries in addition to high-tech ones, she added.

  NT dollar soars

  The New Taiwan dollar posted its biggest gain in 17 months, as overseas investors bought the local currency to purchase the nation's stocks.

  The local currency rose NT$0.198 to close at NT$34.970 from a 15-year low of NT$35.168 against the US dollar on the Taipei foreign exchange market. Turnover was US$657 million, up from the previous day's US$583 million.

  Overseas investors, who own about 16 percent of Taiwan stocks by market value, bought a net NT$401 million of shares yesterday and bought a net NT$3.75 billion net on Monday, a two-month high.
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